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Commercial property insurance covers your building and the equipment inside it. But most of a contractor’s valuable equipment isn’t inside a building. It’s in a truck, on a job site, or in temporary storage. Once equipment leaves the listed location, standard property coverage usually stops.
Inland marine insurance covers that gap. Despite the name, it has nothing to do with boats or oceans. It’s a “floater” policy: the coverage follows the property wherever it goes.
What inland marine covers
Inland marine covers business property that’s mobile or in transit. For contractors and tradespeople, that means hand tools, power tools, mobile equipment, diagnostic instruments, materials headed to a job site, and equipment left overnight at a project location.
Covered losses typically include theft, vandalism, fire, wind and hail damage, and accidental damage during transit or handling. The most common claims are tool theft from vehicles and job sites, and collision damage during transport.
There are limits. Most policies exclude normal wear and tear, intentional damage, and vehicles themselves, which belong on commercial auto. Property stored at your main business address is usually covered by your commercial property policy, not inland marine. Flood coverage varies by policy, so confirm it if you work in flood-prone areas.
Who needs it
Contractors and subcontractors in every trade: electricians, plumbers, HVAC installers, carpenters, landscapers, painters, roofers. Equipment rental businesses. Any business with valuable mobile assets, from a mobile dog groomer to a company that installs equipment at customer sites.
The rule of thumb is simple. If your business couldn’t operate for weeks after losing the contents of a truck or trailer, you need this coverage. A stolen trailer full of tools can cost $5,000 to $25,000 to replace, depending on the trade, and that’s before the lost revenue from being sidelined.
Scheduled versus blanket coverage
Inland marine policies come in two structures, and most contractors end up with a mix.
Scheduled coverage lists individual items with their values. Each expensive item gets its own line: the $8,000 laser level, the $15,000 jetter, the $40,000 skid steer. Scheduling costs more per item but guarantees full replacement value for the things that matter most.
Blanket coverage sets one total limit for a category of property without listing each item. It’s the practical choice for dozens of hand tools and mid-value power tools where scheduling each one would be absurd. Keep an equipment inventory with serial numbers and replacement values so claims go smoothly either way.
What it costs
Industry data from Insureon puts the median cost of tools and equipment coverage at about $48 per month for small businesses, with annual premiums ranging from around $150 to over $4,500. For contractors with $50,000 to $150,000 in scheduled equipment, industry sources commonly cite $350 to $1,200 per year.
Your premium depends on the total value of the equipment, how portable and theft-prone it is, your claims history, the deductible, and whether you choose replacement cost or actual cash value valuation. Replacement cost pays what it takes to buy the item new; actual cash value subtracts depreciation. Ask for replacement cost when you can.
How it fits with your other coverage
Inland marine sits next to commercial property insurance, which covers equipment at your fixed location. The two don’t overlap much: property covers what’s at the shop, inland marine covers what’s out in the world.
It can often be added as an endorsement to a business owner’s policy rather than bought standalone. That’s usually the cheapest route for small contractors with modest equipment values. Larger operations with significant mobile assets typically buy a standalone floater with higher limits.
What to ask your agent
Confirm the territory: equipment taken across state lines should be covered wherever you work. Ask whether the policy covers rented or borrowed equipment, since many contractors rent specialized gear for specific jobs. Check the deductible structure, because some policies apply per-item deductibles that add up fast. And ask about employee-owned tools, which can sometimes be endorsed onto the policy as a crew benefit.
